Abstract

PERROTINI HERNANDEZ, Ignacio. The New Monetary Paradigm. Economía UNAM [online]. 2007, vol.4, n.11, pp.64-82. ISSN 1665-952X.

An article that explains what is the so-called New Monetary Paradigm all about, its nature and origins. While the model of inflation targeting is presented, the rather unknown Knut Wicksell's norm is dealt with as the main antecedent and theoretical background of the new monetary paradigm. Their main hypotheses and analytical outcomes are contrasted with one another afterwards. Finally, Mexico's experience with the model of inflation targeting, adopted back in 1999, is assessed. The paper concludes that price stability has been costly. Therefore, Mexico's economic policy strategy should also contemplate growth and employment targets very much like the Fed's policy framework.